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2011-09-28 02:27:31
ICore IU Operations

P370 IU I-Core Operations
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  1. random notes
    • -Companies are once again using operations as a competitive weapon, and achieving stronger market positions because of it
    • -Best practice firms are often able to achieve increments in multiple dimensions simultaneously, or to at least hold in the other three while an improvement in the fourth is implemented
    • -As the demands of customers increase over time, yesterday's order winners have become today's order qualifiers
    • -Any delay in a critical activity will result in delay in the project overall; they have no slack
  2. operations and supply chain management (OSCM)
    oversees all activities that are directly related to making a product or providing a service; responsible for the conversion of inputs of materials, money energy, people, and information into useful goods and services; the design, operations and improvement of systems that create and deliver the firm's primary products and services
  3. five P's
    people, plants, parts, processes, and planning and control; transformations are achieved through these
  4. types of operation management decisions
    • -strategic (long range business plans, such as acquisition of new resources)
    • -tactical (medium range decisions, typically for the utilization of existing resources)
    • -operational (ones that are narrowly focused for a short time frame, usually involving the execution of schedules or control activities)
  5. role of a company's operations
    • Stage 1 - Internally Neutral (don't mess up). The objective here is limited to minimizing the downside.
    • Stage 2 - Externally Neutral (keeping up with the Joneses). Here operations is only required to match the performance of the competition. Industry practice is followed, but not initiated.
    • Stage 3 - Internally Supportive (be consistent with corporate strategy). Here, a strategy is formulated and adhered to. Processes and technologies are screened for strategic consistency.
    • Stage 4 - Externally Supportive (be a full partner in the company). Here, operations is used to its fullest capability to seek a competitive advantage. Operations is fully involved with all major decisions, adopting a proactive rather than a reactive role.
  6. cost priority
    Companies that compete primarily or exclusively on this priority usually offer a product that is essentially a commodity: little differentiation exists between competitors’ products. These tend to be mature industries with high volume demand. Competition tends to be high.
  7. product quality priority
    High performance products tend to be the “elite” products within the trade. ex. there are cars, and then there are BMWs
  8. reliability or process quality priority
    refers to the degree to which the product meets its own standards, and is therefore predictable to the customer. McDonald’s may not be a high performance restaurant, but it delivers it’s product with an enviable degree of consistency.
  9. delivery speed and delivery reliability priority
    dependable delivery requires a just-in-time system; ex. FedEx
  10. flexibility priority
    the ability to quickly change to meet the needs of your customers. New product introduction, a wide product line, and swift changeovers are all facets of this dimension.
  11. changes in demand priority
    in a volatile marketplace, the company that is capable of rapidly scaling up and scaling down its process efficiently gains a competitive edge in the marketplace. ex. the mall at christmas
  12. order qualifier
    feature that must be present in the product for its purchase to even be considered; minimum level of acceptability
  13. order winner
    product feature used to then select the product to be purchased from the pool of "acceptable" products which meet the order qualifying standards
  14. 4 steps to develop your strategy
    • 1. Segment the market according to the market group.
    • 2. Identify product requirements, product
    • potential, and profit margins for each group.
    • 3. Determine order winners and qualifiers for each group.
    • 4. Convert order winning criteria into specific performance requirements.
  15. productivity
    outputs/inputs; the higher the ratio the better the performance of the unit being measured
  16. labor productivity
    outputs/labor; how much labor was required to achieve the level of output realized
  17. sources of productivity growth
    external factors (environment, safety), improved labor units (education), capital-labor substitution (labor-->automation), economies of scale (the bigger the better), and technological change (new equipment)
  18. pure project
    an autonomous, self-contained team is created which works full time on the project
  19. functional project
    occurs when the project is housed within a single functional division; team members remain a part of their functional units and typically are not dedicated to the project
  20. matrix project
    mix of functional and pure project structures; utilizes people from several different functional areas; project manager decides what and when tasks will be performed but the functional managers control which people and technology are used
  21. interdependencies/precedence relationships
    occurs when, for technical or other reasons, a task can not be started until another is completed; activity that needs to be completed immediately before another activity
  22. critical path method (CPM)
    the sequence of activities in a project that forms the longest chain in terms of their time to complete; this path contains zero slack time; it is possible for there to be multiple critical paths in a project
  23. early start (ES)
    the maximum of the EF's for all the predecessor activities, if node has no predecessor then this equals 0
  24. early finish (EF)
    the ES for that activity plus the required time; ES + duration
  25. late start (LS)
    the LF for the activity minus the required time; LF - duration
  26. late finish (LF)
    the minimum LS of all the node's immediate successors; if the node has no successor, then the LF = expected duration of the project (the critical path length)
  27. slack
    the amount of time an activity can be delayed without delaying the completion time of the project; the difference between the late and early start times of an activity
  28. most economical duration for a project
    spending money in one area (crashing costs for an activity), we will avoid certain other costs and thus still come out ahead
  29. crash costs
    activity direct costs; costs to reduce the length of an activity by 1 time period; total cost of performing a task at its minimum duration
  30. administrative costs
    project indirect costs; costs to manage the project; for every time period that the project continues, a certain amount of money is required just to administer the project, over and above the cost of performing the various activities that make up the project
  31. penalty costs
    if the project is completed by a certain time, these costs are avoided, however, for every time unit beyond the deadline, a penalty cost is imposed
  32. conversion process
    changes the substance of the project; ex. turning wood to paper; material is transformed from one substance to another
  33. fabrication process
    changes the shape or form of the product; ex. cutting and sewing material to make a jacket
  34. assembly process
    separate parts are physically joined or combined; ex. putting together a computer - each part remains physically distinct
  35. testing process
    some form of inspection is occurring; the part is examined and measuring against some criteria and is either passed or not
  36. job shop
    produces a wide variety of products in a wide variety of quantities; jumbled flow of materials through facility; equipment is grouped by function; ex. hospital
  37. batch
    typically has a subset of products which are produced regularly; still has jumbled flow, but some level of standardization; equipment is grouped by function, which the product seen as moving from department to department
  38. assembly line
    flow of product moves in a line, equipment is organized around the required sequence of operations; low variety of products in high volume
  39. continuous flow
    used for commodity items; produces a very high volume; rarely, if ever, stops; equipment is organized along the required sequence of operations; items are usually not discrete
  40. concept development
    first step in product development; design is laid out and the general product architecture is developed; ; target market is defined
  41. product planning
    second step in product development; investment requirements are determined; market is further defined by small scale testing and interaction with potential customers
  42. product/process engineering
    third step in product development; prototypes are built and decisions about tooling and equipment to be used in full scale production are made
  43. pilot production/ramp-up
    fourth step in product development; non-commercial production begins; testing for ability to produce desired volumes; detailed testing of the product; production begins slowly with volumes increasing to demand levels gaining experience and confidence
  44. concurrent/simultaneous engineering
    parallel approach, where as many steps as possibly are occurring simultaneously; attempt to involve as many groups in the project as early as possible
  45. industrial design
    designing with the needs of the customer in mind; attempts to reduce the time to develop a new product
  46. Quality Function Deployment (QFD)
    primary tool of this is the House of Quality; it forces member to work together in a cooperative rather than competitive manner
  47. capacity
    the ability to hold, receive, store, or accommodate; the amount of resource inputs available relative to output requirements over a particular period of time
  48. capacity focus
    a production facility works best when it focuses on a fairly limited set of production objectives; it should select a limited set of tasks that contribute the most to corporate objectives
  49. capacity flexibility
    the ability to rapidly increase or decrease production level, or to shift production capacity quickly from one product or service to another; achieved through flexible plants, processes, and workers
  50. how to determine capacity requirements
    • 1. use forecasting techniques to predict sales for the individual products within each product line
    • 2. calculate equipment and labor requirements to meet product line forecasts
    • 3. project labor and equipment availabilities over the planning horizon
  51. service capacity
    time-and location-dependent (cannot be taken home and used later), subject to volatile demand fluctuations, and utilization directly impacts service quality
  52. the product line approach
    treats the delivery of the service as a manufacturing process rather than a service process; the key focus is the efficient production of results not on the attendance on others; ex. McDonalds
  53. the self-service approach
    places a greater burden on the customer in the production of the service; ex. salad bar or gas station
  54. the personal attention approach
    face-to-face contact; direct contact with a service provider who tailors the service to the customer
  55. psychology of queues
    • -Unoccupied time feels longer than occupied time (ex. filling out bank slips while waiting at the bank)
    • -Pre-process waits feel longer than in-process waits (waiting in line verse waiting to wait)
    • -Anxiety makes waits seem longer (possibly wrong line?)
    • -Uncertain waits are longer than known, finite waits (ex. 1 hour from this point or reservations)
    • -Unexplained waits are longer than explained waits (reasons)
    • -Unfair waits are longer than equitable waits (anything other than first come first serve should be explained)
    • -The more valuable the service, the longer the customer will wait
    • -Solo waits feel longer than group waits (misery loves company)
  56. operations
    manufacturing, service, and health care that are used to transform the resources employed by a firm into products desired by customers
  57. supply (chain) network
    processes that move information and material to and from the manufacturing and service processes of the firm; the pipeline movement of the materials and information needed to produce a good or service
  58. service
    intangible process, cannot be patented, cannot be tried out and tested by a costumer before purchase, requires some degree of interaction with the customer, heterogeneous (vary from day to day and even hour by hour as a function of the attitudes of the customer and the servers), perishable and time dependent
  59. servitization
    a company building service activities into its product offerings for its current users, that is, its installed base
  60. efficiency
    doing the right things to create the most value for the company; produce a good or provide a service by using the smallest input for resources; ex. using the fewest people possible at a bank counter
  61. effectiveness
    doing the right things to create the most value for the company; ex. minimizing the amount of time customers need to wait in line
  62. value
    quality divided by price paid; competitive "happiness" is being able to increase quality and reduce price while maintaining or improving profit margins
  63. mass customization
    producing products to order in a lot sizes of one
  64. sustainability
    the ability to maintain balance in a system; a strategy that is designed to meet current needs without compromising the ability of future generations to meet their needs
  65. triple bottom line
    relates to the economic, employee, and environmental impact of the firm's strategy; economic prosperity, environmental stewardship, and social responsibility
  66. planning
    process needed to determine the set of future actions required to operate an existing supply chain
  67. sourcing
    the selection of suppliers
  68. making
    a type of process where the major product is produced or services provided
  69. delivery
    type of process that moves products to warehouses or customers
  70. returning
    processes that involve the receiving of wornout, defective, and excess products back from customers and support customers who have problems
  71. total quality control
    a philosophy which aggressively seeks to eliminate causes of production defects
  72. business process reengineering
    an approach that seeks to make revolutionary changes as opposed to evolutionary changes
  73. operations and supply chain strategy
    setting broad policies and plans for using the resources of a firm to best support the firm's long-term competitive strategy
  74. straddling
    occurs when a firm seeks to match what a competitor is doing by adding new features, services, or technologies to existing activities. This often creates a problem if certain trade-offs need to be made
  75. order winner
    a dimension that differentiates the products or services of one firm from those of another
  76. order qualifier
    a dimension used to screen a product or service as a candidate for purchase
  77. activity-system maps
    a diagram that shows how a company's strategy is delivered through a set of supporting activities
  78. core capabilities
    skills that differentiate a manufacturing or service from its competitors
  79. operation and supply competitive dimensions
    cost, quality, delivery speed, delivery reliability, coping with changes in demand, flexibility, and new-product introduction speed, and other product-specific criteria
  80. project
    a series of related jobs usually directed toward some major output and requiring a significant period of time to perform
  81. project management
    planning, directing, and controlling resources (people, equipment, material) to meet the technical, cost, and time constraints of a project
  82. work breakdown structure
    the hierarchy of project tasks, subtasks, and work packages
  83. activities
    pieces of work within a project that consume time. the completion of all the activities of a project marks the end of the project
  84. gantt chart
    shows in a graphic manner the amount of time involved and the sequence in which activities can be performed
  85. earned value management
    technique that combines measures of scope, schedule, and cost for evaluating project progress